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By Durratul Ain Ahmad Fuad
KUALA LUMPUR, Nov 17 -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended higher today owing to a higher overnight Chicago Board of Trade (CBOT) soybean oil market as well as expectation of stronger demand, Palm oil trader David Ng said.
He told Bernama the recent export estimates by cargo surveyors point to higher demand.
“We locate support at RM4,780 and resistance at RM5,100,” he said.
Echoing the same reason, Mumbai-based Sunvin Group’s commodity research head Anilkumar Bagani said the market ended higher today following bullish surge in the overnight CBOT soybean oil market, the Dalian Commodity Exchange and the Zhengzhou Commodity Exchange during Asian hours.
“Fitch Ratings says the impact of weaker CPO prices in 2022 is likely to be cushioned by higher yields and a significant release of working capital.
“Fitch expects CPO prices to decline due to higher output and is assuming the Malaysian benchmark spot prices will average US$750 per tonne (US$1= RM4.18) versus US$1,050 per tonne in 2021.
“Key factors to watch include the pace at which foreign workers return to Malaysian plantations, the impact on output from a recurrence of La Nina in late-2021 and potentially higher capex in Indonesia for downstream projects,” he said.
Yesterday, Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin said Malaysia has no interest in restricting the export of crude palm oil unlike Indonesia because CPO exports have been very profitable for the nation even during the pandemic.
Zuraida noted that Indonesia is able to restrict the export of CPO as the commodity is subsidised by the government there.
Zuraida said a total of 30,000 foreign workers are expected to begin arriving into the country to work in the palm oil plantations by the end of this month.
At the close, the CPO futures contract for December 2021 advanced RM80 to RM5,325 a tonne, January 2022 increased RM102 to RM5,089 a tonne, February 2022 added RM111 to RM4,899 a tonne, March 2022 rose RM105 to RM4,717 a tonne, April 2022 improved by RM106 to RM4,563 a tonne, and May 2022 strengthened RM91 to RM4,427 a tonne.
Total volume went up to 69,832 lots from 53,591 lots on Tuesday, while open interest surged to 274,424 contracts from 257,256 contracts previously.
The physical CPO price for December South jumped RM50 to RM5,400 a tonne.
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